The content of the above quote is often used by politicians, economists and others, making Social Security appear to be part of the federal budget. It is not. Social Security is a separate account.
The Ronald Reagan presidency presided over an increase in the Social Security payroll tax when federal deficit spending was increasing. The excess Social Security receipts not paid to recipients were used to cover some of the federal deficit spending in the budget, an amount now reported to be in excess of 2.6 trillion dollars. If that is ever paid back to Social Security, it will have to be appropriated by Congress and included in the federal budget. If Social Security is part of the deficit problem, it is because of political misuse of the funds for other than their intended use.
To provide a clearer perspective of America’s fiscal problems, I will quote from the book, “The Fine Print” by David Cay Johnston.
“Congress requires that taxes be withheld from your pay, but it lets executives and hedge fund managers pay taxes when they choose to, which is often years and sometimes decades in the future. As for profitable corporations, Congress requires them to delay paying part of their taxes. Many employers in 19 states can now keep state income taxes withheld from paychecks. General Electric, Goldman Sachs and Procter & Gamble have these deals...” and other major corporations.
“Now what about those executives who get to earn now and pay their taxes later? This is a deal Congress says you cannot participate in unless you are an executive, a movie star, an athlete or some other highly paid worker.” For lower paid workers there are retirement savings plans, such as a 401(k) plan that defers taxes on a limited contribution, if you can afford to contribute. The quotes are from chapters 18 and 22.
The fiscal cliff and many causes of our national debt and deficits are exposed in David Cay Johnston’s book. America’s fiscal problem is not too much regulation and excessive taxation of corporations. If megacorporations and individuals that receive much of the nation’s wealth were paying their just taxes, we would not have the national debt and deficits.
The medical industry’s profit motive and unnecessary medical care drive Medicare costs, and the use of excess Social Security funds to offset general budget deficits has weakened that program. The economic philosophy of Milton Friedman and others of the Chicago School animates our economy. That philosophy is dehumanizing and it is predatory.